Opposition Senator Mark Golding (left) proposes a quota system. At right is Carib Cement marketing manager, Alice Hyde. - File Photos

Less than three months before the current waiver of the 15 per cent duty on imported cement expires, monopoly producer, Caribbean Cement Company Limited (CCCL), says it is unsure whether it can emerge unscathed from the tussle between governments.

The company is expressing fears that the ongoing Caricom trade tussle may end up prolonging the suspension of the common external tariff (CET), which Caricom members are required to impose on extra-regional products.

Prime Minister Bruce Golding and Industry Minister Karl Samuda continue to accuse several Caribbean Community (CARICOM) countries of throwing up roadblocks to Jamaican exports.

"I would hope that it does not impact on the present issue, because the two matters are not related in any way, shape or form," CCCL's marketing manager, Alice Hyde, said this week.

"Market forces, competitiveness, efficiencies are what should determine what the market share is, and that's what a free and fair market is all about."

Serious concerns

Carib Cement laid no firm basis for its fears of being caught up in a trade war, but it mirrors concerns of parent, Trinidad Cement Limited (TCL), which is still seething from the approval of the cement duty waiver for Jamaica, Trinidad and Suriname by the Caricom Secretariat.

In January, the Caribbean Court of Justice, the region's final trade arbitration body, gave TCL leave to sue the CARICOM for its decision.

Similar action is also proceeding against Guyana, which last year unilaterally suspended the CET on cement from third countries.

Balancing for all

Jamaica's commerce minister has said he needs to balance the needs of three interests when he makes his decision.

"I must seek to satisfy all interests - the consumer, the interest of the importer and the interest of the producer," the industry minister told Wednesday Business last week.

"It is very important that I remain balanced."

Fear of retaliation

The debate over the waiver has been one of open competition, but now Carib Cement fears that trade retaliation could also factor, though even with the waiver, it would command at least 75 per cent of the local market.

The waiver allows importers to bring in 240,000 tonnes of cement duty-free, or about 25 per cent of demand.

CCCL sold 720,000 tonnes of cement last year, commanding 84 per cent of the local market.

CCCL, which is at the twilight of a US$177 million expansion project and needs to recoup its investment, argues that a further suspension of the CET would limit the amount of revenues it could garner.

It wants a shot at 100 per cent of the market.

Rift in trade group

The Jamaica Manufacturers' Association (JMA) has sided with an extension of the CET waiver, causing a rift inside the trade group whose membership includes Carib Cement and importers.

Neither CCCL nor the JMA has disclosed the outcome of a meeting they had on the issue last week.

The deregulation lobby has been joined by the parliamentary Opposition, with Senator Mark Golding echoing calls for a competitive market and sides squarely with the Government on the issue.

"There needs to be a balancing of interest. The local manufacturer must be protected, but I believe that the society on a whole has a legitimate interest in there being more than one source of supply, because of the benefits that competition has proven to bring," he said, noting that this was his, rather than the opposition party's position.

He has proposed a quota system to settle the market share issue.

Not appeased

But CCCL's Hyde is not appeased by the suggestion.

"It will not be beneficial to us. The market needs to determine what the percentage is, not an imposed quota," she shot back.

Last year, CCCL exported 28,463 tonnes of cement, and though it has not said how much it earned from this, CCCL says it plans to grow exports to 15 per cent of group revenues, which at its financial yearend, March 2009, totalled $8.8 billion.

"Whether the waiver is extended or not we intend to intensify our exports because we will have even more cement-producing capacity," Hyde said, even as she shot down suggestions that her company has been forced by the current competition to become more efficient.

mark.titus@gleanerjm.com